Hello ladies and gents, I know it has been a while but I am back and bring good news. I have received a substantial increase in pay. Yes, a new job opportunity opened up for me and I pounced on it as if I were an animal that pounced upon things. As such I’ve decided this would be a good time to go over my financials and figured why not bring you along for the ride. So, here we go!
The first, and easiest, bit of my financial plan is my straight monthly budget. Luckily for me, I’m a single guy with single guy needs. I eat many pizzas, drink craft beer, and have a lower consumption rate of toilet paper. I’m unfortunately not part of a relationship, but I pay attention to that money management for couples stuff. You know, long-term nest building types of decisions and investments. My insurance provider offers good family plans for when I get that ball rolling. I figure this makes me look more financially desirable to “The Ladies.”
The Low Hanging Investment Fruit
So here I am, a proverbial bachelor with more money to spend and no desire to take on additional sources of debt. I don’t have any student loans to repay, no lines of credit, and my rent is fairly cheap. Come readers; take my hand as we navigate the tricky road of investment.
First up to bat with the new job is a contribution matched 401k offered by my new employer. This, ladies and gentlemen, is something that you’re going to want to take advantage of straight from the gate. It’s pre-tax income, is squirreled away into the hands of (hopefully) competent investors, and if you are as luck as me your employer gives you matching contributions when you participate. This is something you’ll want to max out every year to really take advantage of those benefits.
Of course if you’re like me, you’ll probably max out your contributions immediately, which leaves you with a dilemma of where to put your money next. While a savings account is nice, and necessary for some of the more fun things in life, you might also look into an IRA (the financial plan, not that Irish group) or Roth IRA. Once again this is an untaxed source of income, and can even qualify you for some deductions when it comes to tax season. Do your research to decide if traditional or ROTH is for you.
Now there are other, safer, investment opportunities for those of us entering the work force. You could shop around for the best CD interest rates and receive a nearly risk free return on your contribution. You could even stick your money into a savings account and make a few percent that way, while keeping your funds liquid. I would however caution against the urge to splurge. I know that check with all those zeroes looks nice now, but try to imagine what it could look like with just a little discipline and patience.
(Header Photo by Jesus Solana)